A buy-sell agreement for a partnership is very different document from a buy-sell agreement for a corporation, even though their objectives may be the same, because of the distinctions between the corporate and partnership form of doing business. Moreover, the requirements of the Unifrom Partnership Act and the California Revised Limited Partnership Act are not as comprehensive as the statutues governing corporations.
Consequently, the charter documents of most partnerships are usually not as extensive and specific as the articles of incorporation and bylaws of even simple corporations and may leave open issues that must be addressed in the buy-sell agreement. Perhaps the most important distinction between partnerships and corporations is that a partnership, particularly a general partnership, is not generally recognized as a separate entity distinct from its partners.
For example, general partners (unlike shareholders) are not shielded from liabilities of the partnership and may remain subject to claims even after the partner's withdrawal.
Consequently, clients should be advised and prvosions should be included in any buy-sell agreement to protect a withdrawn partner from possible claims against the partnership, especially those in existence before the withdrawal, if the partnership agreement does not cover this issue.
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